Air Products’ on Producing, Distributing & Dispensing Green Hydrogen At Scale

Eric Guter

While hydrogen fuel-cell electric vehicles are zero-emission, most of the 'gray' hydrogen gas used and produced today is derived from hydrocarbon feedstocks through steam methane reformingVX News interviewed Air ProductsEric Guter, Sr. VP of Mobility Solutions, on how the world’s leading producer of hydrogen gas is responding to warp-speed global demand for decarbonized energy and fossil-fuel-free 'green' hydrogen. Noting the 'distinct role' that hydrogen fuel cell technologies have to play in reducing emissions in heavy-duty industries, Guter highlights Air Products' market-making investments in world’s largest commercial-scale green hydrogen export project in NEOM, Saudi Arabia.

Eric, you joined us for the December VX Green Hydrogen Forum where hydrogen’s role in the future fuel mix and the issues of production and distribution were addressed.  Elaborate for our readers on Air Products’ history in this space and Hydrogen’s – especially relating to California and mobility.

Air Products has been in business for 80 years since just after WWII, and during that time period, we've been in hydrogen production for just over 60 years. We got involved in hydrogen in a major way starting in California back in the early ‘90s in response to updated CARB specifications for transportation fuels, and around the same time, we got really invested in hydrogen for mobility as that was emerging towards the end of the 1990s and early 2000s.

So, we've been early pioneers in the technology and thought leaders in developing station and fueling infrastructures and protocols.

What energy and environmental policies and mandates are now driving increased investments, globally and in California, in hydrogen production and distribution.

I think it's a confluence of a number of factors, but most prominently an update to the low carbon fuel standard has certainly helped drive down the carbon intensity of transportation fuels beginning in 2020, all the way out to 2030. That, coupled with increasing mandates in the sale of zero emission vehicles and the state's very aggressive targets for decarbonizing all sectors of its economy, are really driving this confluence of events that are materializing in a major focus on hydrogen as a potential next transportation fuel.

As a leader in hydrogen production for over 60 years, we see ourselves having a role squarely in that. Today, hydrogen is most prominently produced throughout the world using natural gas as a feedstock, which is commonly referred to as gray hydrogen. But now as we move to different sources of hydrogen, we have blue hydrogen which is partially decarbonized through carbon capture and storage and green hydrogen produced via renewable power that has no carbon emissions associated with it. Air Products has a project at-scale in the Gulf coast where we sequester a million tons of CO2 per year from a hydrogen production facility that uses natural gas as a feedstock.

We feel that our expertise squarely lies in that area, but also as I mentioned, we've been distributing and dispensing hydrogen for mobility and believe that we can solve that piece of the puzzle.

Much of California’s policy efforts to decarbonize transportation to date appear to have been focused on electrification regardless of the vehicle segment—light, medium, or heavy duty. Indeed, many environmental advocates pressing for reduced carbon emissions in California, frame the policy debate as a competition between battery electric and hydrogen fuel cell technology? 

First, we should note that fuel cell technology IS electrification.  It just produces the electricity in a distributed fashion within the vehicle rather than having it all stored in a large battery in the vehicle.  I do think, however, that we need to move away from that argument quickly. Each technology has a distinct role to play in the market. We're generally technology agnostic, but we do believe, however, there is a general advantage of hydrogen technology in heavy duty vehicles or heavy-duty applications because as you scale up, just the sheer weight of the vehicle does not lend itself as well to battery electric technology.

And certainly, both technologies are continuing to evolve and accelerate, and so in the future, I think each has a distinct role to play. Both are zero-emission, which is great, and we're focused on making sure that to the extent hydrogen is a solution to the state of California’s problems, we're ready with the production, distribution, and dispensing of that hydrogen to support that vision.

Eric, CARB has been very focused of late on medium and heavy-duty trucks market. What needs to happen on the regulatory side to make hydrogen competitive with electrification.

We're early days in Class 8 truck development, and right now, the efficiency of those trucks are envisioned to be comparable to that of diesel vehicles. I think as we go further out on this journey, the efficiency of those vehicles will improve. Additionally, as companies like Air Products contemplate hydrogen production projects that are green and typically carry with them larger costs—as we develop projects of increased scale—we're working to drive down that price of hydrogen so that at the end, the consumer ultimately can transition smoothly with very little cost impact. We need a clear policy framework that will encourage significant investment in the infrastructure to support zero-emission vehicles of all classes.  We also need the right incentive structure to help people and businesses purchase those vehicles without economic hardship.

What's needed in the hydrogen space from state regulation and, possibly, subsidies, to scale the use of Hydrogen transportation?

California’s low carbon fuel standard already supports the transition to hydrogen, and I think that's been very successful. The CEC has also been very supportive of installing infrastructure through grants, subsidies, and cost sharing for the infrastructure build out. I think today, we see sufficient and stable policy going out into the future, which gives us confidence to begin taking the ball from entities like the CEC and begin to complement their efforts to invest in infrastructure in a much more major and rapid fashion.

 Certainly, we're always welcome to policy tweaks that can encourage more broadly the adoption of hydrogen or electric, particularly ones that can do that quickly and effectively.  I think the state has done an outstanding job and is recognized globally as a leader in the space with respect to the policy

Eric, the VX Webinar in December included Chris Cannon from the Port of LA. Address the potential of the San Pedro Bay ports in the accelerating the evolution of the use of hydrogen for mobility.

The Ports of Los Angeles and Long Beach combined bring in about 40 percent of the nation's goods, which requires a tremendous amount of infrastructure to handle and move those goods. Hydrogen can be a significant potential resource to help the ports decarbonize, both in their port operations and also in the Class 8 trucks that are moving all of those goods to and from the port. As we think of a project like NEOM, where we want to bring green ammonia to various jurisdictions that can be converted to green hydrogen, to us that's a win-win; working with ports to help them decarbonize and allowing us to bring in the ammonia for hydrogen service that's required to recognize this vision.

Eric, you mentioned NEOM, referring to NEOM in Saudi Arabia, and the efforts of that region-city on the Red Sea to be an innovation center for commercializing clean energy intensive industries, such as Green Hydrogen. Elaborate on what NEOM is doing as a new model for sustainability and why that city initiative attracted Air Products. Is it a model for what the Western world should be doing?

We're incredibly excited to have announced the world's largest green hydrogen project to date using renewable power—solar and wind—to produce hydrogen via electrolysis. We intend to distribute that hydrogen globally as ammonia and convert it back into hydrogen at its destination wherever it's needed to help jurisdictions like California meet zero emissions transportations goals. It represents, in totality, about a $7 billion investment with $2 billion of that being downstream to invest in infrastructure. As a Californian, I'm very excited about the prospect of bringing some of that infrastructure here to California, which ultimately means jobs.

In order to drive down the price of green hydrogen, which is traditionally four to five times more expensive than traditional means of producing hydrogen, one of the key elements is very inexpensive renewable power. We can only do that in geographies where they have world class renewable power resources. The sun doesn't always shine, and the wind doesn't always blow, so we're trying to find the highest capacity factor in that renewable power to drive that cost lower and lower. Saudi Arabia is one of those geographies that has world class renewable power resources. There are others around the globe, including Australia and Chile as an example, where other projects are being contemplated.

Once you have very low cost of power, then we look to attacking the electrolyzer itself and driving down those costs significantly. To date, there have been very small electrolyzer projects around the globe, largely demonstration. We believe that only through doing projects at-scale can you significantly draw down the capital costs and operating costs associated with the electrolyzer. Volume matters in this effort.  So, those two elements coming together are very important, in the long run, to significantly drive down the price of green hydrogen for what the market needs at the end of the day at the pump.

Bring that global perspective of the Hydrogen marketplace to our readers:  How is investment today in Hydrogen impacting global efforts to decarbonize transportation and industry, more generally?

Certainly, there are many places working very hard to decarbonize their industries and their countries, both in transportation and industrial sources, including the EU, Canada, Japan, Australia, and other jurisdictions, which, in totality, are creating new economies and certainly momentum across the globe to move towards zero emissions more quickly. Success breeds success here in terms of getting to the decarbonization vision because there is now a globally recognized climate change issue that needs to be addressed and this is one of the only ways that we can collectively and effectively address it.

Lastly, If we have this conversation two to five years from now, how different will be the market for hydrogen? From Air Products point of view, in terms of the market opportunities, what opportunities are on the horizon or just beyond the horizon?

If you look at the press today, there are announcements every day about jurisdictions looking to decarbonize further. Sector by sector there are companies making investments in this area. It's the most exciting time I can remember having ever been in hydrogen. So, looking at your two-to-five-year time horizon, I think it's very difficult to predict because it is moving so fast and is so dynamic. But we're excited about the prospect to move as quickly as we can to help enable jurisdictions like California and others to meet their zero-carbon emissions goals as quickly as possible.


“We're incredibly excited to have announced the world's largest green hydrogen project to date (in NEOM) using renewable power—solar and wind—to produce hydrogen via electrolysis.”